The supporters of Initiated Measure 21, the real 36% interest rate cap on payday loans, often note that payday lenders charge South Dakotans 574% interest. IM 21 backers get that number from this Pew Charitable Trusts 2014 fact sheet, which shows that 574% is just the average—apparently, some South Dakota payday lenders charge even higher interest.
Pew notes that the average cost of borrowing $300 for two weeks at South Dakota payday lending stores is $66. But remember, payday lenders base their business model on trapping customers in much longer cycles of debt. Pew finds the average cost of carrying a $300 payday loan for five months is $660. We tie with Wisconsin for the fourth-highest short-term loan costs in the nation. (Dang—there’s another chip in the argument that it’s cheaper to live in South Dakota.)
Pew also finds an odd inversion of normal market competition: states with more payday lending stores per 100,000 population generally see higher costs for consumers. The number of stores and the prices they charge is trumped by sensible regulation: the population-relative number of payday lenders and the price of their loans decrease as regulation increases (with the exception that in states like South Dakota, which imposes no rate caps, the population-relative number of stores is slightly lower than that in states with higher than average rate caps).
Pew notes that, for the most part, increasing rate caps doesn’t affect consumer access to these unhealthy fiscal products until states resort to 36% rate caps or outright bans on payday lenders:
States with high or no rate limits tend to have the most payday loan stores per capita.1 (See Figure 2.) But in states with lower rate limits, payday credit is not significantly constrained; instead, fewer stores simply serve more customers each. For example, in the three years after Colorado lowered permissible interest rates for payday loans, half of stores closed; but each remaining store served 80 percent more customers. Borrowers’ access to credit in the state was virtually unchanged. In the 15 states that prohibit payday lending or interest rates higher than 36 percent, there are no payday lending stores [“How State Rate Limits Affect Payday Loan Prices,” Pew Charitable Trusts, April 2014].
Erin Ageton of payday lending corporation Select Management Resources cites the apparent unwillingness of payday lenders to stay open under a 36% rate cap as the core of “her” lawsuit to get Attorney General Marty Jackley to rewrite his official explanation of IM 21 to favor the payday lenders’ propagandistic position. But if payday lenders do go out of business due to new state and federal regulation, should we shed any more tears than when state and federal regulations shut down other loan sharks, or brothels, or meth dealers?
South Dakota should be a land of opportunity for workers, not loan sharks. Let’s pass the 36% rate cap and reset our lending economy to fairness.
Thanks for keeping this issue front and center, Cory. It is going to take a lot of sunshine to cut through the fog machines run by the payday loan sharks.
I was told that there was a story on the news the other day of a lady that borrowed $1200 from a title loan place. She was making $300 a month payments on this loan for 18 months. That’s $5400 she owed on a $1200 loan in 18 months. I think she ended up losing her car to the title loan sharks.
The well-worn wisdom that the first thing you should do when you find yourself in a hole is put down the shovel comes to mind. Payday loan sharks are convincing people to buy their shovel and keep digging. Payday loans don’t solve problems they just postpone the day of reckoning for a little while and make the final reckoning insurmountable.
This industry prays on the poor and desperate and we are complicit as a state in this evil. Come live in the light SD–vote yes on IM 21!
Again, why hasnt anyone set up one of these low interest high risk loan companies and run these lenders out of business? This looks so simple, you loan money at low rates and they loose business. The free market would handle the problem, why hasnt that even started to happen?
Come on people say something different that shows someone is willing to step up and loan this same kind of money for the same risk.
The Blindman
“In the 15 states that prohibit payday lending or interest rates higher than 36 percent, there are no payday lending stores”
That is likely because traditional financial institutions such as banks and credit unions offer a variety of products that would be far less expensive than payday loans so the predatory lenders find they can no longer compete and can no longer pay the rent on their high visibility locations.
I support the 36% rate cap for several reasons, but the primary being that I don’t feel it is appropriate to prey upon those who aren’t as financially savvy as the rest of us. I fully acknowledge that the average person obtaining a payday loan fails to understand the true financial impact and how difficult it would be for them to get out of the hole. Payday lenders have had years to offer solutions to the issue but when common-sense rules are enacted such as the requirements to list the total effective APR for the loan they don’t embrace these reforms… they fight them, claim they are unfair to their business model, and in some cases they sue to overturn the rules. Enough is enough.
That said, I will admit I struggle with one thing. Since traditional financial institutions won’t offer small dollar loans (some won’t even look at you unless you need at least $2,000) and because their is a high probability that they wouldn’t approve many of the people who need some short-term cash due to a lacking credit history, non-steady employment, questionable ability to repay etc. I am left wondering what the other options are. When there are no payday lenders, do we see an uptick in the pawn shop business? Do we see more loan sharking in back alleys? Surely the need for the money doesn’t disappear… so where is the need fulfilled?
I know there are already laws (SCRA: Servicemembers Civil Relief Act and the Military Lending Act) that don’t allow predatory lenders to charge more than 36% interest to members of the military. The SCRA also drops this interest rate down to 6% when a member of the military is called into active duty service (some restrictions apply, but not relevant to this discussion). I doubt these laws eliminated the financial need from members of the military, so clearly they are still finding ways to obtain the needed funds. Can we expect the same if these laws are passed impacting everyone, or will we see other problems as a result?
In my prior post their = there. Eye new I’d mess up they’re two! (That is as difficult to type as it is to read)
As to Bill’s comment I think we are both getting to the same point. I understand why there aren’t lower interest rate options because many of the people obtaining these loans are high risk which means when they don’t pay those costs need to be shifted to those that do. I doubt a small bank could make it work if they charged 36% to anyone who walks in off the street seeking an unsecured loan so it makes me wonder what happens.
Is this as situation where once the predatory lenders go away most of the problem goes with it? Does the constant barrage of payday lending marketing materials or their high visibility of their stores and neon signs somehow push people into borrowing and spending money they really didn’t need? I’m sure there are some who find themselves in a pinch when their water heater bursts or their transmission locks up 12 days before payday – but I wonder if these are a small fraction of those who use payday loans. I can’t help but wonder how many of those loans are used by people buying flat screen TVs or using the money to buy a new cellphone that they didn’t actually need. Perhaps if the option for “easy money” goes away – so does the need.
http://www.argusleader.com/story/stu-whitney/2015/04/04/whitney-real-story-behind-citibank/25296111/
Economics professor Robert Wright at Augustana had a great analogy in the Argus Leader “My Voice” opinion column comparing the four figure interest charged by the city of Sioux Falls on a unpaid parking ticket to the cheaper interest paid on a payday loan used to pay that parking ticket.
“It does not take a rocket scientist to calculate that you’ll be better off paying, say, $15 to borrow $35 to pay the ticket before the deadline ($35+$15 = $50 < $70). But if a certain initiated measure passes this November, you won’t be able to save yourself that $20 because the APR on, let’s say a 10-day loan, for $35 that costs $15 is over 1,500 percent. That rate may seem outrageous, but interest rates calculated for short periods on small sums are deceiving, just like it would be deceptive if an unpaid intern who landed a paid position at the same company claimed that she received an “infinite” raise. What really matters is the dollar amount of her salary or the fact that in the above scenario borrowing would leave you $20 better off than not borrowing, even with a four digit APR."
http://www.argusleader.com/story/opinion/voices/2016/02/24/voice-going-steal-poor/80865434/
And why isn't the proposed initiative also going after banks who charge four figure "interest rates" on insufficient fund checks with their exorbitant fees on bounced checks? It seems a tad duplicitous to allow those who have checking accounts to allow themselves the pleasure and convenience to write their own "payday loans" while denying the same practice to those who don't have or can't afford those privileges.
we’ve already gone after the banks numerous times to eliminate charges but they keep slipping back in under the door, professor.
try getting off the payday loan carnival. the bank, otoh, will just close your account, send you to collection, and move on. everybody, except poor people whose next step is living under the bridge, can’t get by in this society w/o a bank account.
sorry 4 the double negatives, but u r smart. oh, I thought I was responding to the professor but it is only you, wuff.
janklow, murpheys and sanford, 3(4) akind but who is reardon you mention and why?
“Western Bank founder Thomas Reardon pushed to remove South Dakota’s interest rate limit before many in the state (including Janklow) had even heard of Citibank.”
http://www.argusleader.com/story/stu-whitney/2015/04/04/whitney-real-story-behind-citibank/25296111/
Right now my credit union in Sioux Falls offers a $500 “start-up loan” at 14%, a whole lot better than a payday loan. People without credit history or with collections or judgments don’t qualify. For them, the credit union offers an “Elan credit card” with no APR for 12 months. What happens after 12 months? The rate is 12-21% or 10-21%, all a whole lot better than a payday loan. (I hope I understood all that correctly.) Call your credit union.
To those concerned folks who struggle wondering where people would go without payday lending: Not only are credit unions often viable options, but just about anyone would be better off going to friends, family, churches and charities. Many agencies can help with various needs, reducing the need for a loan. Many payday loan victims are going to end up going to friends, family, churches and charities anyway, and it would be so much better to go there BEFORE being caught in a debt trap.
Thx. was too lazy to read up on yet another SD celebrity (banker)
Don, I found that analogy rather hollow because A) you can appeal a parking ticket, B) the fees don’t continue to climb at the rate of nearly 600% annually if you’re late paying it, and C) no payday lender writes a loan for only $35, so in reality the borrower would need to borrow something like $200 at an effective APR of ~600% which can easily snowball into much large debt.Professor Wright fails to acknowledge that those who rely upon payday loan centers to pay their
traffic tickets most likely won’t be paying off that short term loan in a few days or even a few weeks. Instead they will roll that loan over into another loan, and another, and another and soon enough that $15 turns into $200. The industry statistics prove this, and any attempt to limit the number of times a person can roll over a payday loan have been fought against by the payday lenders.
As far as the argument against late fees or insufficient funds penalties – that is a conversation we can have, but it is really a distraction from the core issue here. As far as I’m aware, if you bounce a check from your Home Federal or First Premier checking account there is a one time fee… but it doesn’t continue to grow at the rate of 600% annually! So in effect these types of arguments are simply strawmen.
Cathy, your credit union needs to get out and advertise, maybe even hand out flyers on the sidewalk in front of every Dollar Loan Center. Let people know about that competition in the marketplace, and the credit unions could shut down the payday lenders before we even get to vote on the 36% rate cap.
If Im reading the credit union rules right first you would need to join the credit union. I dont know what that cost is now, but it used to be the cost of a share in the union. The last credit union I checked was $25. If you need that small of an amount you wouldnt even have that money.
I still dont see the answers I’m looking for. Why arent there low interest high risk loans being utilized now if its so easy to do?
The Blindman
I think payday loans are terrible. But we always blame in this country and usually we only look one direction. Nobody makes anyone take a payday loan. And you can give me your liberal BS that people need these to make ends meet, when I will guarantee that most of these people have large cell phone bills, Satellite TV bills, Netflix accounts and many are gambling. Don’t even try tell me I am wrong, because I work with many of these types of people. The best way to put payday loan companies out of business, QUIT BORROWING from them!
I know poor people are evil, Stub.
Stu, I’m glad we agree payday loans are terrible, predatory products. But keep in mind, your advice—quit borrowing—is kind of like telling folks not to get attacked by wolves. Payday lenders count on there being just enough people whose desperation will overwhelm their reason. In that case, we are within our rights as a society to regulate a business that takes advantage of vulnerable people.
Similarly, we probably agree meth is bad, but we don’t try to wipe out meth use just by telling people to quit using meth. We ban meth and arrest the dealers. Ditto payday loans.
Bill D. if a two-week $300 loan at Chuck Brennan’s rates costs $66, the federal credit union could probably fold the $25 membership fee into the first loan and still come up with a total cost of $50, maybe less. And then if that person needs a second or third loan, that person is a member, and the next loan is even cheaper.
When I was in high school in Minnesota in the seventies the Dems passed a bill to give the parents tax credits for thirty percent of the tuition in private schools. That gives the money to the parents rather than the big businesspeople. That is the difference between dems and reps.
Sounds like something the good people of MN would do, Roger! Another thing that I think that is for the good of the people is in MN you can register to vote up to and right on the day of the election. In SD the deadline to register is a few weeks before an election.
I am not against regulating these type of loans. Just saying that bad decisions and poor priorities lead to there existence. As a society, we have to hold people somewhat responsible for their actions also.
The reality is credit unions and banks don’t offer those type of loans to those who have a history of missed payments, those who don’t have a steady employment history, or those with horrible credit. The credit cards that are offered to these type of borrowers are what we call secured cards. That means if someone with horrible or nonexistent credit wants a credit card with a $500 available balance, they need to deposit $500 into an account with that institution where it is “locked” so it can’t be withdrawn. After a period of time where that person shows responsibility, that secured card can be converted to a traditional credit card and that initial deposit is returned to the customer.
That scenario doesn’t work for someone who finds themselves in a need for some cash today for car repairs or groceries. This is why payday lenders are so successful – because they know they are the easiest and most convenient way for that person to get the cash they need now without having to bother friends or family.
So if payday lenders go away, it is doubtful the banks or credit unions will fill that gap entirely. What may happen is people will reach out to family more often or they will work with their church (if they have one). Pawn shops will probably do more business, and the impulse buying will decrease because people won’t be able to go grab a quick $1,000 to use on something they really didn’t need.
Much like when you outlaw drugs…. the demand may not go away entirely, but if they are harder to get less people will find themselves in trouble.
Of course this entire argument could have been avoided if the pro-predatory lending crowd would have suggested mandatory financial education courses for anyone seeking a payday loan. Or they could have required curriculum in all SD high schools to teach about these practices. Or they could have pushed for more regulation to prevent unlimited loan rollovers, hidden fees, repossession of vehicles due to a single missed payment, etc. Yet for years nobody said or did a thing and everyone just turned a cheek to let these predators siphon money from the poor into their pockets. And now we are supposed to feel sorry for low income folks that may not have any other options? Now we are told that people actually care about those who use these services?
Too little, too late I’m afraid.
Jenny, grow up a little bit! Nobody said poor people are bad. There are a lot of people who are poor because of bad decisions and terrible priorities though. I know you feel everyone should have the same cell phones, toys, TV’s, vehicles etc., but that is not the way it works. Don’t tell me these people need these loans to survive when they haven’t made any sacrifices from the things they don’t need to survive. Granted, there are a small segment that is making sacrifices and still barely getting by, but that is a minority. Like I stated earlier, I work with people and their finances everyday and most people are taking high interest loans and paying overdraft fees because of terrible priorities!
So stum you want to allow predatory lenders to continue preying upon that “minority” who is making sacrifices and still barely getting by just to ensure those who make bad decisions or have “terrible priorities” are taught a lesson?
I’m sure you realize it is difficult to separate out the needs from the wants, and frankly that isn’t a job I would even attempt. So what is your solution to help those with legitimate needs vs. those who just want a new cell phone or TV? We have had a few decades for ideas but I haven’t heard anything which would help those with a legitimate need. So now that we have found ourselves needing to resort to drastic measures by enacting a rate cap, people come out of the woodwork to say it isn’t fair. Really?
A good book for you to read, Stub, regarding the poor in this country is “Nickel and Dimed by Barbara Ehrenreich. I highly recommend this book to anybody and probably a lot of my fellow Dems on here have already read it. It follow the author as she tries to make it on a minimum wage job in places like Wal Mart in cities all over the country.
Have you ever thought about rents and auto insurance unfairly high Stub? I know plenty of poor people (look around they’re all over) and I don’t see them with a lot of material stuff as you claim. They have old cars, older worn clothes, they shop at goodwill and Salvation Army, and really having a cell phone these days is NOT a luxury. I’m not really going to get riled up about a poor person smoking a cigarette either. It’s better than being addicted to hard drugs or alcohol. Being poor is very stressful so if they need to wind down with a cigarette, I can understand. Nobody wants to be poor and trust me, most people are poor b/c of unfortunate circumstances, making some bad mistakes or what not.
I meant to say rents and auto insurance ‘being’ unfairly high. Also health insurance, the price of college, food, just really everything. This country is an expensive place to live. In other countries, you don’t have to worry about a bankruptcy from getting sick. (But damn it, we have freedom and guns in ‘Merica.)
There are some good things I like about our country also.
Craig, have someone read my posts to you please. Too bad I can’t post cartoons to make it easier for you.
Jenny, do some research. The destitute that you are talking about are not the ones taking out payday loans.
stump I’ve read enough of your posts (including the last one) to know you are nothing more that a troll who takes pleasure in trying to anger people. You aren’t worthy of my time and you add nothing credible to any discussion you participate in.
By passing measure, you are driving the borrowers of this type of money to the next easiest loan opportunity. That would be the lenders that break arms and legs, pull teeth, and smash hands for missed payments. Not everybody lives next to the big citys where you can loan shop when you dont have a credit rating. That means more pawn shop loans, loan shark violence, and more family getting hit on, in many cases again.
Ya, pawn shops, thats it. But in order to get money there you need something to pawn. Its only a hop skip and a jump to someone elses stuff when that happens.
Until youve seen your belongings in a pawn shop with your initials on them you have no idea.
The Blindman
Bill I have a higher opinion of my fellow man – even those that may be down on their luck. I don’t believe they will automatically resort to theft or other criminal activity unless they were the type of person who would have done so anyway. (There is an argument that what the payday lenders currently do is no better than theft… but I digress)
As to pawn shops in general – I consider that a better option than a payday loan. Assuming of course that all fees and costs are clearly disclosed, at least with a pawn the person obtaining the money has a physical exchange that ensures they understand what is at risk. With a payday loan the only thing they see are a lot of numbers on some paperwork that is flashed before them so quick that they don’t have time to read or understand it. Pawn shows are also required verify identities and copy drivers licenses etc. so if stolen items are pawned we know who pawned it.
That said, there are already several states that have outright bans on payday loans and several others which have rate caps. Surely we should have sufficient data available in these areas to know if crime rates have increased or if loan sharking is a growing problem. Unless I see the data, I’m not about to make assumptions because that smells a bit too similar to fear mongering.
That said, there are already several states that have outright bans on payday loans and several others which have rate caps.”
Yup and none of them have the same problems as SD.
If you need money bad enough, you will beg barrow or steal to get it. If there is nobody that will lend at a rate you can afford, whats left?
You will never protect people from their own bad decisions. It would have been so simple to drive the PDLs out of business if someone would have put their money where their mouths are, but that hasnt happened. Why?
Free enterprise is only an illusion. If these loans could be had a ny other way, why hasnt it been done to run the PDLs out of business?
Short answer, because those kind of loans carry to much risk.
The Blindman
Craig the typical liberal. It is sure a lot easier when everyone falls in step with you and does not challenge your very limited opinions. If you read any of my posts, you would know I am against payday loans, but you choose to make senseless claims. I will try find a carton that can help you understand personal responsibility.
Bill, “By passing measure, you are driving the borrowers of this type of money to the next easiest loan opportunity.”
I have some sympathy for this argument, but it might be based on a false assumption: repayment of the loan. You paint the pay-day loan transaction as a get your loan, pay it off, and be done with the need. Isn’t the more true reality that the loan spurs more loans and more debt to pay off the initial loan – a loan spiral if you will. At some point of debt the loan must get called, so isn’t the lender then in the same boat for the need for credit from “the next easiest loan opportunity” only now with more loan need?
Are PDL really meeting the need for credit, or are they delaying or exacerbating that need?
Although no private entity has stepped in to provide this need for credit, I have some hope for the Warren proposal to use post offices as banks for these small services. Frankly I would rather see my money loaned out for 0% for these purposes rather than to big banks. I guess it is “typical liberal thinking,” but this is a role the government can take to support the social safety net for all.
Bill Dithmer, Are you saying society is better off with the payday loan industry operating in SD? I would say it is quite apparent that we are not better off with these predatory lenders.
Where is the evidence that the people who get the payday loans are better off? I can understand that they might get another month where they get to pay their rent, but what happens after this? It’s my contention that all the payday lenders do is take advantage of people that are desperate. In the best case scenario, the borrower gets a reprieve for a month, but what happens after this? The next month comes and they don’t have the rent and now they are accumulating interest and fees at an astronomical rate. Instead of confronting their financial issues when possibly they could figure out how to do something about them, they have ensured that they will be indentured servants to the payday loan sharks.
No Darin, what I’m saying is that if there was a simple fix, why wasnt that done first? If these people are so sure lending money to high risk people is profitable, why wasnt, isnt that being done as we speak instead of interfering with free trade without a fix already on the table. So far all I hear is talk, nobody is stepping up to the plate to loan.
The Blindman
Bill why do you suggest the only “fix” for this issue is someone else offering loans at a lower cost? Other states have found a way to fix the issue is to simply eliminate the practice of payday loans. Congress found a way to “fix” the issue for members of the military by capping their rates at 36% as well.
For many of these borrowers alternatives already exist but they simply don’t know about them. When someone charges 600% APR for a short-term loan they tend to have more money for flashy commercials and glossy mailers. The local credit union strives to keep their costs low and doesn’t divert as much to marketing or solicitation. Perhaps once those payday lenders are removed from every street corner their former customers will seek out these alternatives and be much better off.
Craig, there are no alternatives. You said as much yourself. Are you saying that you are stepping up to the lending party?
Can someone here give just one example of a high risk low interest loan in the state of SD right now?
The Blindman
You are not going to find private banks who are willing to do this. You need to paid for risk and believe me these are risky loans. There is not much profit for banks if any on small loans and you start charging many of these off and the banks are losing money. There is no for profit business that wants a product that loses money. I don’t not see the people that get these loans and then pay them off. I see the people that get these loans continually until they are so deep in fees and interest that they can not ever pay them off. Again, they are a bad product, mainly used by people who are not very responsible or disciplined with their finances.
Stub, if you’re working a low wage job and you get sick and don’t have health insurance and can’t work for awhile but then your older car breaks down and you need it get it fixed. Oh, and then the medical bills start coming in, and then that dang auto insurance bill needs to be paid or you’ll get ticketed.
One catastrophe that life gives a person can give you major financial setbacks NOT DUE to being lazy!!!.
ABSOLUTELY it can be a poor working person that will take out a payday loan just to put some dang food on the table or pay of a medical bill!
No, you Stub, are the one that needs to open your eyes a bit and look at things from a non-partisan perspective.
Maybe if you were diagnosed with cancer and had to quit your job b/c of it you would realize that cell phones and toys are not making people take out payday loans.
But yes, I do agree about the gambling. SD never should have voted in video lottery. Addictions are hard to treat and we need to get these people help instead of enabling them through the payday loan industry.
And even if you have medical insurance, you can get very far behind and in those bills and even have to file for bankruptcy. It’s maybe not good insurance, certain diagnoses not being covered, high premiums whatever, a LOT of working people have this financial problem. I know you have seen those donation jars at the gas stations asking for help for someone’s illness, Craig. Medical benefits and donation jars for medical bills is probably just a phenomenon in this country. I don’t really think you would see those in Canada or Europe.
Jenny, everything you say is true, but doing away with PDLs doesnt make those things go away does it? No money for food, none for medical bills, and well, no money for anything, unless.
I’m still waiting for just one place in South Dakota that services low interest high risk loans. This is all meaningless unless you can find that.
The Blindman
Because of universal healthcare no one goes bankrupt in the countries that have it. A person living in those countries can also pay out of their pocket for additional private insurance if they want to if they are not satisfied with the socialized system.
The Canadian Healthcare system has an agreement set up with Mayo Clinic to serve Canadian’s hard to diagnose cases, transplants IF the Canadian wants to go to Mayo. Mayo Clinic takes other country’s universal healthcare patients.
There are also Minnesotans and North Dakotans that will go to Canada for much cheaper drug prescriptions, cheaper dental care.
If you are rich like Donald Trump, I’m sure this country has the best medical care in the world, but only if you’re rich. It sucks if you’re a poor sick person here.
I meant to say Stub (not Craig) in my donation jar sentence.
When this conversation started two years ago, everyone here said that they knew that money could be found to make loans at low interest. Now the coversation has changed from knowing where you can find the money to if we close the PDAs the problem will fix itself. Nothing has changed in the economy, why would this problem fix itself?
Ill put in the first thousand but it cant be touched until there is $25,000,000 in the bank drawing nterest to make loans with. Come on you rich donors, lets see some money.
The Blindman
What do you do Jenny? I work with the type of people you talk about. You can throw out the crazy extremes all you want. That is not the norm of the people taking payday loans. I will lump having 2 or 3 kids before you can afford them into the category of irresponsible decisions. Where I am from the people you are talking about are the rarity and not the norm. Take a look at a lot of the people working those jobs, not having health insurance etc., why are many in that position? I know you bleeding hearts want to think everyone with financial woes are there because the Republicans have put them there, but get out in the world and work with these people and you will see that for a lot, it is self inflicted. Of course we can’t just let them die on the streets, but personal responsibility needs to be taught at a much younger age to try change things for the coming generations. Safety nets are important, but the liberals have lead people to believe that anything goes and they will be bailed out. There are plenty of organizations that help with safety nets (even the liberal hated churches) and people should be looking for that kind of help instead of turning to the government to intervene with everything.
The only place to get a loan that is short term would be through your family, which would be the same ones you would go see to pay off the payday loan as it suffocates you. The pawn shop can give you short term money on some of your stuff and the pawn shops are monitored by the police to see about stolen property, so there’s that. The Payday loans guys need not worry, they would be getting 36% money on loans, after this is passed, which is a whole lot more than any other lending institution would be able to charge. What are they bitching about? I think there might be more people that would want to get in the game for the 36% secured than you think. I would. That beats the return on anything Wall Street has on the offer.
Pay people a living wage, provide universal coverage, stop jailing people for pot, provide affordable housing and reliable public transportation and all of the sudden, you could give the finger to these outlaw lending places.
Jerry that return your talking about wont happen if you arent paid back. They call them high risk for a reason.
When we lived on Pass Creek I made “no” interest unsecured loans for small amounts of money. This went on for thirty years. Altogether, I Loand about ten grand. Of that money I got $5000 paid back, and will never see the other five again. That was at no interest.
All of these people were just like the ones you were talking about, hard luck. For a couple it took twenty years and a reminder when they got financially secure before I saw any money. Those others that didnt pay anything were written off.
Its funny, there were a couple of people that tried to get another no interest loan from me on top of the one they already had. It didnt happen. All three of those people ended up in jail.
The Blindman
Pay people a living wage, provide universal coverage, stop jailing people for pot, provide affordable housing and reliable public transportation and all of the sudden, you could give the finger to these outlaw lending places.”
But right now none of those things are happening. There is no free housing, and no free transpertation, and there never will be. Somebody has to pay for it. Where should that money come from?
The Blindman
How is a Payday loan an unsecured note?
I never said any such thing.
The Blindman
No free transportation, affordable public transportation. No free housing, affordable housing. There is plenty of money to pay for all of this, right off our shores for one place. Several Trillion lie there. There are hundreds of corporations that pay less tax than the lowest paid tax payer in this country. How many billion do we have right here in Sioux Falls that is being held in trust for the wealthy, why is that?
The Post Office is one place that could provide loans just like they did in the past.
Up above, Stu said he’s not against regulating payday loans. He also spoke of wanting to “hold people”—i.e., borrowers, the folks on whom payday lenders prey—”somewhat responsible for their actions also.”
You know what? I’m o.k. with that, too. Let’s hold borrowers responsible. But let’s not let that “hold people responsible” mutate into “let them get screwed by loan sharks; serves ’em right!” Let’s encourage personal financial responsibility by cutting off this source of what looks like easy money. Let’s say, “You know what? Sometimes you just can’t get a loan. You haven’t earned the credit rating to allow you to walk out of a bank or credit union with a loan.” Or maybe we say “You can get a loan from the credit union or Lutheran Social Services, but we’re going to require you to go through some paperwork, to attend some personal finance training sessions.”
Does that responsibility get the job done?
@stuart mcfarlane
You are saying that poor people choose to be poor? That the poor people in the US have financial problems because their self inflicted? Have you ever been on a reservation, worked on a reservation?
That would be a start. Again, there are most likely people out there that have been saved by a one time payday loan, but they would again be the minority. There are many that can’t afford to pay back the principal let alone interest and fees. These lending practice need to be stopped and the interest rate and fees regulated, but unfortunately personal irresponsibility is the root cause for many of these needed loans. I wish I had an answer as to how change peoples’ thinking.
Madman, maybe it is time for people to leave the reservation. I know that more money is spent, in Minnesota, on reservation school funding by a large margin over the rest of the public education system with the result of under a 25% graduation rate. I know liberals believe tossing money at a problem will solve everything, but that facts show just the opposite. Don’t even try to tell us that alcoholism, drug abuse, domestic abuse etc. is a by product of good decisions. The cycle needs to be broken, but just throwing money at it has proven to only exacerbate the problems.
Of course we can’t just let them die on the streets, Funny,I haven’t heard a wingnut candidate ever express that sentiment. They pretty much always say that poor people like to live “that way.” Then we hear we are not responsible for these people. They need to take care of themselves,then they cut vet’s services,and food stamps and heat assistance,etc. Are homeless vets and those with mental illnesses and damaged bodies really responsible for their plights? To a large degree wingnut’s and their policies are the culpable parties.
Bill: “I’m still waiting for just one place in South Dakota that services low interest high risk loans.”
The state of South Dakota seems to do a pretty good job at handing these types of loans out. The only problem is that they only go to corporations and not individuals in need. So if you want to finance a new beef packing plant you’re in luck… if you need a new radiator for your car in order to get to work… not so much.
Snarkiness aside -there are some other programs in place for individuals. The Community Home Improvement Program (CHIP) provides low interest loans for the improvement, repair or addition to borrowers’ home.
There are Community action agencies which provide assistance (often grants) to low income families in need.
Some cities have specific programs to help those of low or moderate incomes. For example Sioux Falls has the Community Development Department which has programs for housing improvements, rental assistance, assistance with security deposits, homebuyer assistance etc.
The Federal Government has dozens of different programs for assistance with housing, education, nutrition/food, and even transportation or a cell phone if you meet income requirements. Granted we don’t have a government office every other block in the busiest sections of town and it probably takes longer to fill out a few of their forms than it does to show some ID and answer questions at the payday loan center…. but the good news is many of the times the government assistance programs are grants rather than loans.
Depending upon what is in someone’s wallet, they may have access to a credit card cash advance. Yes they are expensive as they could be as much as 30% or more, but far cheaper than 600% APR of a payday loan.
Some people can also qualify for installment loans from their local bank or credit union. Some Credit Unions also offer payday alternative loans (PALs) which have rates that cannot exceed 28%. These are unsecured loans ranging from $200 to $1,000. Specific example, a Credit Union in Sioux Falls offers unsecured loans for as low as 11.5%APR with dollar amounts starting at $250. Another Credit Union offers signature (unsecured) loans for those with a credit score at or below 599 for as little as 16.99%.
Hard to say what some consider high risk loans. Harder yet to determine what someone would consider a low cost or low interest loan (personally I consider 17% interest very high and wouldn’t even consider such a loan, but it is all relative). However surely we can all agree that these rates are far, far less than what payday lenders charge.
Some churches off emergency loans where they loan a few hundred dollars with little to no interest. Obviously these would be for members of a church and vary greatly, but for some people it is an option.
Agencies such as Lutheran Social Services offer financial education programs which include credit counseling as well as resources to provide assistance to those in need.
If someone has life insurance or a retirement plan they can often borrow against these in times of need. Any interest payments are typically paid back to themselves so the only true cost is perhaps a bit of lost investment income and a small fee where applicable.
So are there options? Yes there are. However not all of these apply to all types of borrowers or are applicable for all needs. None of these options come in the mailbox screaming at you to borrow money. None have fancy neon signs or billboards telling you to stop in. So obviously not all borrowers will know they exist, and admittedly the payday loan center on the corner of a busy intersection sure seems like it would be faster and easier right?
We also know not all borrowers will be approved for these programs and options. But here is the kicker… not everyone is approved for payday loans either! The payday loan centers pull credit reports and if someone has a history of failing to repay other such loans they will reject them. They don’t promise 100% approvals on unsecured products, so people need to stop pretending they are offering a service to everyone that can’t find financing elsewhere.
For those that do end up getting a payday loan, per the CFPB, more than 80% of those loans are renewed or followed by a subsequent loan within two weeks. Payday loans are not a cure for financial troubles – they merely delay them. Many times these people end up being forced to find alternatives much later after they have already spent hundreds or perhaps even thousands in interest and fee payments to the payday lenders. Then they end up in deeper trouble where they need to find one of the alternatives above. So what do the payday lenders really offer? Convenience. But that convenience comes at a VERY high cost.
Again Cory once you said there would be money if PDLs were shut down. That aint gonna happen is it?
Madman, I lived on the Pine Ridge for 62 years. Its not the people but the leadership that keeps the members poor. They could change that in five years if they were willing to have jobs they couldnt control cross their borders. The leaders would rather see dead suicide victims the create the only thing that will ever bring the suicide rate down, jobs.
The Blindman
Craig, but no loans like we are talking about right?
The Blindman
Dithmer raises good questions as usual. You want to dictate goodness in a world that just isn’t good. For most people this is just a theoretical discussion which means almost nothing unless you intimately know the people borrowing (or lending).
Dithmer asks why the market doesn’t fill the void. Who wants to deal with these people? Nobody unless there’s lots of money to be made. Your normal investor type person doesn’t want to dirty his hands or even feel guilty about collecting what’s reasonable considering the risk.
Shouldn’t the question be in those states that only allow low interest rates does a much more undesirable knee cap breaker fill the void? Or are there states that have struck a favorable balance of regulation, rates, social problems etc. South Dakota typically doesn’t collect as much data as other states, so why not use them as a guide rather than try to create a new wheel.
Bill Dithmer, for the sake of argument, let’s say that there are no other commercial loans available to the desperate payday loan customer. My contention is that payday loan customers are simply digging the hole deeper and end up with a hole they cannot climb out of. In the meantime, they have struggled to try to pay back the payday sharks for what could be years before it is finally apparent that there is no way out.
Do you really believe that 95% of these payday shark customers have any hope of paying the loan back and righting their financial ship? If they can’t afford rent this month without accruing 575% interest, what makes you think that they will be able to afford rent next month while accruing 575% interest on the money borrowed from the sharks?
I contend that for the vast majority of payday loan customers they would be better off facing the music sooner rather than after borrowing from payday loan sharks.
Happy Camper, you sound like you are rationalizing bad conduct will still happen. Then you probably likewise believe that we should legalize prostitution because that would do away with the criminal activity associated with prostitution.
Just because we can’t cure all of society’s ills associated with private loan sharking does not mean that we should legitimize and condone the public payday loan shark industry.
Craig, you and I are on the same page. Thanks for laying that all out.
But Darin we can’t pretend everyone is a church lady and we have no idea what those church ladies do behind closed doors. I might agree legitimizing pay day lending makes it seem like a reasonable option which it is not, but you’re still trying to dictate people’s behavior which hasn’t changed much over time. Just cause someone agrees with you doesn’t mean you’re right. The bigger question remains the right balance of regulation and self determination.
A Payday loan center will not loan you the money unless they have collateral. They want 600% interest on that collateral where they make millions and millions right here in South Dakota. As long as a loan is secured with something, who could not make money with a 36% cap? If a Credit Union can make money on 5% loans or a bank as well, why can’t loan centers make money on 36% short term? Of course they can, they just can make millions and millions fleecing the public. I am sorry that you lost 5 thousand Blindman, but couldn’t you see that coming?
” My contention is that payday loan customers are simply digging the hole deeper and end up with a hole they cannot climb out of. ”
Darin, you are sure right about that.
Just because you kill PDLs doesnt mean the need for that money has gone away. It just means another direction these people will have to go. Where is that going to be again?
The Blindman
“Just because you kill PDLs doesnt mean the need for that money has gone away. It just means another direction these people will have to go. Where is that going to be again?”
Bill, you act like there is no end to the money that these people can get from payday lenders. There is an end as soon as the customer doesn’t have collateral or misses a payment. Then they are right back to square one except the meter is running on the PDL loan.
Blindman asks “I’m still waiting for just one place in South Dakota that services low interest high risk loans.”
By statute Blindman that would be each counties’ County Poor Relief program as required by SDCL ch 28-13. These programs are obligated by state law to provide temporary assistance to fol;ks in need, and they require that these funds be repaid at a reasonable rate of interest.
Close the PDL’s and the Poor Relief programs would get some more publicity and have to step back up to the plate.
Where did people go before the Payday loans? I know one thing, how many pawn shops and payday loan places did you see growing up Blindman? I don’t remember seeing any of these places until gambling came to these parts. I have lived in South Dakota for a couple of decades more than legal gambling has and have a pretty good memory of how things were. I don’t remember the incredible number of these places here, do you?
Happy Camper, we have regulations that protect the rich (Securities regulations, banking regulations, anti-trust regulations, insurance industry regulations, etc.) Surely, we can have some regulations that protect the poor and desperate from exploitation.
Good catch there bearcreekbat! I had forgotten about that. Indeed, that is in place. Well, there ya go. A fitting answer to a long standing program that may have been forgotten.
“The meter is running on the PDL loan.”: Depends on the state. My friend in Colorado told me last week she went to the PDL and asked for some money to bail out her daughter as she does again and again. The response was you borrowed $500 in 2007 (I think) so now you owe us $600. Wow only $100 in 10 years was what I thought. They must be quite regulated, so she just walked. But she also owes 140k from the 30k she borrowed for her student loans. She doesn’t have restraint. I know her. A lot of you want everyone to be a nice middle class upstanding citizen and think you can dictate it but that’s just not reality.
Although I agree that Stu is a troll, his attempt to turn “you liberals” into some sort of insult falls flat:
Here is Google’s definition of “liberal:” —
1. open to new behavior or opinions and willing to discard traditional values. “they have more liberal views toward marriage and divorce than some people”
2. (of education) concerned mainly with broadening a person’s general knowledge and experience, rather than with technical or professional training.
Merrian-Webster online adds this to the definition:
2 a : marked by generosity : openhanded
b : given or provided in a generous and openhanded way
c : ample, full
. . .
5: broad-minded; especially : not bound by authoritarianism, orthodoxy, or traditional forms
6 a : of, favoring, or based upon the principles of liberalism
b capitalized : of or constituting a political party advocating or associated with the principles of political liberalism; especially : of or constituting a political party in the United Kingdom associated with ideals of individual especially economic freedom, greater individual participation in government, and constitutional, political, and administrative reforms designed to secure these objectives.”
Rational people agree with these positions Stu.
Wait a minute Happy, there are PDL’s in Colorado that restrict the interest rate and the PDL’s are still in business? PDL’s here say they would all be out of business if the interest rate is capped.
Ha ha ha Darin. Are you for real? Crash of 02, 08, Enron, Lehman Brothers, etc etc. You must be joking or just fooling yourself.
I just can’t believe people would lie Darin.
The PDL’s are only lying when their mouths are moving.
And look Darin who their customers are.
BCB, you are assuming that those counties have any money. I know four that dont have enough money to do that, Todd Bennett, Jackson, and OLC. Oh sure there is some money there but not enough to take the place of a PDL. It isnt the same anyway is it? Your talking about county clarity, not financial loans. Where can you get one of those low interest high risk loans anyway?
As far as I know, there are no PDLs in either the Pine Ridge or the Rosebud. They get their money the old fashioned way, they pawn it.
The Blindman
“Where can you get one of those low interest high risk loans anyway?”
Stupid family and friends then cross your fingers.
As long as you have the collateral, you can go into any bank or credit union and get the money for as high of risk loan there could possibly be. Just like the payday loan center, you have to have collateral of more than requested to get the moolah.
http://www.mn-indianed.org/docs/Olson%20Am%20Indian%20Ed%20in%20MN%20Presentation.pdf
Stump, here is the latest stats I found on MN Native American high school grad rates. It is not 25% as you said, it was 45% in 2012. Still discouragingly was too low but not anywhere near what you said. You need to have accurate figures if you’re going to debate here.
A Native American is still better off in MN since they have an education governor that deeply cares about them and no stealing of Indian Grants going on.
Bill D, C Brechtelsbauer is indicating there will be money. Will the folks using payday lenders now want to switch to those products, or will they find the rules too strict.
Hap, small question: does the 36% rate cap seek to dictate goodness or just dictate against badness? I’m inclined to believe there’s a difference.
the reason they dont use conventional lending now is because they are to strict. You just answered your own question.
And what you asked Happy, it just dictates against badness and gives you a warm fuzzy feeling.
The Blindman
stu-u whine all liberals blame republicans then u (in same post!) blame this problem on liberals. u have no cred.
business models for banks and predatory lenders are the same, with different clientele. banks won’t waste their time, though regulated, on filling this need. They could. Its a market they could serve. they could provide a valuable service to their communities by education financial literacy for those not born into it. Its not a fast track business model. predators, exploiters, erin ageton and lisa furlong, the visible faces behind this industry and fake interest cap (18%), have a business model that is quite a bit more aggressive than wells fargo would like to implement but can’t due to regulation.
“we” cry more about Bernie madeoff who screwed a bunch of rich, likely republican irresponsible financial managers, because its sexy, than you do AIG ect who took down/shook down the world economy and blamed it on “irresponsible homeowners”. It was just a business plan. Just like trump’s bankruptcies. He dabble on “universities” that were just as aggressive money churning frauds like PDL.
nobody cares about PDL screwing people already in a world of hurt, except you. You justify it as the free market. there is no free market. there is no privacy. there are just the 1% republicans continually coming up with a new screw job. @ years ago in SD it was EB5. Last year, MCEC. This year, its erin ageton (and her “dope smoking petion circulators”) (C)2016CH (jkch)
Do you get paid to litter and distract here? Are you the deceased Stuart McFarlane?
Another scam going on are prospective employers being able to check a possible hire’s credit rating out. That to me is not right and a breach of confidentiality. I have a very nice credit rating but I have always been bothered about screwing the people that have the lower credit ratings when trying to secure a job. For gosh sakes, they need a job, why make it that much harder for them! It is a form of discrimination! Wrong! They need that job just as much as the person that has the over 700 credit rating!
But then a corporation can go bankrupt and the government bails them out and they can start all over again. This country is so insanely corrupted and skewed towards favoring the rich and powerful, it’s disgusting
How come all the rest of the states that have enacted interest limits on pay day loan companies are still in business, he asks?
These guys seem like they are doing okay within the limits of the law http://www.cashadvanceonline.net/colorado-payday-loans/
I am sorry that you lost 5 thousand Blindman, but couldn’t you see that coming?”
It isnt as simple as that Jerry. I was raised to help others when I can. That also extended to our home place. For ten years we let two different mothers and their kids and one young man live in one of our houses. They had to pay for their propane, we stood the electric, and they all got back on their feet.
Thats the way I grew up.
Did I see it coming? Ya probably, but at the time I wanted to believe the best in people. If i had money and you needed some, you got money or help, or both.
I will never be rich because of this character flaw, but I can sleep most nights with a clear conscience.
For the record, every one of those people were natives, and just like every other group of people there are good and bad. Thats why I get so pissed off when someone calls me a racist. Some talk the talk, and some walk the walk, at least I tried.
It goes against everything I am to tell these things, we were even told never to brag about what we donated to who. Thats about all I ever got out of the book of fables.
And that $5000, well it would have come in handy a few times, but we got through it. Life goes on.
The Blindman
There are three reasons why lending in Colorado.
1. They have much lower actual unemployment.
2. They have more and better paying jobs.
And 3. They arent South Dakota so any attempt at comparing the two states is meaningless.
The Blindman
No Jerry, in today’s age, collateral will not buy high risk or even standard risk loans. You need collateral and cash flow and a credit rating. Yes short term small dollar loans on just collateral but not to high risk. They just don’t need the bs that goes with repo.
So your contention is that if you have better paying jobs, then you do not need the payday loan centers. Okay, but they still exist there and are doing very well. So here in South Dakota, if we had better paying jobs, we still would have the need for pay day loans and there is not argument there from me. My argument is that there should not be 600% interest to do the lending, 36% is more than adequate.
Yes Les, we are speaking of small loans here though, correct?
les what do u kno about the bs that goes with the repo? banks repo big borrowers and that isn’t bs.
u are just saying the business model is not aggressive enough to deliver the returns their chosen business, lending, wishes it had, for small borrowers. that’s why banks periodically get slammed for churning fees and charges. without regulation, the shark frenzy is the real bs.
u just want nice smooth banking for people who can cleanly afford it and, screw the rest of little people. pick your reason or philosophy or politics.
Your lack of comprehension is littering the site, lessy. Small loans are not worth the repo bs was my statement.
Jerry we are going in circles now. Yes 600 in a high interest rate if you dont pay when you agreed to pay. Its a piece of paper that says what the penalty will be for late or no payment. It is an agreement in writing. It is a contract, without a cosigner.
The Blindman
1.pleasure derived by someone from another person’s misfortune. ironic u kno the word. such an erudite scha·den·freu·de. wiki
I just saw this quote you left:
The king of ad hominem attacks claims I attack family. Speculating that your family possibly lives in the same hell you must live in caused your hate and anger hardly qualifies as an attack on them. You get the twistit award today, leeslee!
wanna talk about your hate and anger? You remind me of the guy in safeway in 1966 who said : “Marge she ain’t got no tits.” I was standing in line, shoeless, long haired hippy do doubt. I’ve listened to rednecks like you all my life. Its the reason RC is still a racist safe haven.
I am playing a free concert in the poorest county in America tomorrow for teenagers. you?
Oh, “short term small dollar loans on just collateral but not to[SIC] high risk.”
site littering. is that like a dam sight? I forget
I asked u to coffee once. you started to come around to some important liberal generous principals recently. is that why you come around here? are you unclear what you are?
fu
Who is this Marge and what kind of music is at this concert?
There is no circle about it. We have people who do not know what 600% interest really means. For those people, as a democracy, we must find ways to protect them, thereby, all of us. The only way to do that is to make the field a little more level by not abusing them in the ways that 600% does. 36% is as absurd as it can be, but at least that is something that will not enslave them.
here yah go asshole:
explain your hatred. I quote you:
“leslie
2016-03-04 at 23:34 .
larry-les says wapa stays in state. saw your post was opposite. I used to work wapa issues so I gut question les, but so far don’t care enough to research. u know off top o’ yer head? just wondering.
Les
2016-03-05 at 09:33 .
A cost plus company, barry? Ns shirlock. Isn’t every company in biz cost plus if they are still in biz? Cry me a river big boy or buy Corp stock.
I doubt you did much wapa llessy or you’d know and understand wapa power commitments.
Sorry I forgot barry. We didn’t build that company. You win.”
shall I go on…? put up or shut up.
off to bed already?
“leslie
2016-03-05 at 21:43.
57-67% of wapa’s $ 1 billion budget goes to 10% 0f its employees to market power wholesale to 15 states. SD dams likely generate the most but les the resident know it all republican here is sure most if not all power generated here stays here. long term customers in the states are municipalities, government, tribes and 4-5% goes to private power brokers god knows where. revenues are 1.2 bil and expenses are 1.2 bil annually using 2014 numbers.
[uncited source: http://www.blackhillscorp.com/investor-relations/financial-information/annual-reports. les thinks wiki is a problem but still thinks all/most wapa stays in state]
this reflects on $70,000,000,000 BHP/BHE new utility company building/ campus shining on the ridge above RC blocking every one else’s view and blinding interstate travelers with 3-4 stories of glass….”
Les
2016-03-05 at 22:43 .
Attorneys may be able to get away with your math, lessy but thank God most accountants cannot! 70,000,000,000.00=70Mil. Not.
Back on Wikepedie for more worthless info honey?
barry freed
2016-03-06 at 07:27 .
Les,
No need to be vulgar and abusive.
If you don’t know what ‘cost plus’ is you should look it up so you don’t look foolish. It means the powerful monopoly, BHP, … ha[s] cost over-runs paid for by someone else.
From Wiki:
A cost-plus contract….”
“Les
2016-03-06 at 08:01
Yes, Barry Obama Freed. They didn’t build their business….”
“leslie
2016-03-07 at 08:28 .
Pfsst! so much for meaningful discussion, les.”
“Les
2016-03-07 at 11:20 .
Living in your head must be pure hell, leslie. Does it cause the same hell for those you love if love is even possible with so much hate?
….We all have belief systems, Lynn and some are more impenetrable than others. I’m pretty bull headed my self at times. Imagine a guy like leslie calling Trump fascist.”
“leslie
2016-03-08 at 11:59 .
les when u don’t have the facts, argue the law ect. when all else fails, I believe what you just did is referred to ad hominum attacks (1. name calling, 2. attack family)….”
Yes Cory some of the high rates are unconscionable. They’re just too harmful. My sister lent money to a friend (with a payback schedule) cause he was never gonna get out of it. The fees made it perpetual.
Jenny, look up Native American graduation rates strictly for reservations and not as part of the general population. There are two near me. One has a grad rate of 27% and one less than 25%, so that is where my number came from.
Les are you saying all 1%ers are Republican? Do some checking and you will find out there are plenty of Democrats who fall into the 1% category.
“all”? 1% republicans are the ones doing damage that dems clean up. cycle o’ life, stucfgradz
that’s like asking if 1% really means .01% or .001%
that’s yer only comment?
okgottagobye
You are not worth commenting on. Your koolaid drinking, spoon fed liberal talking points are old. I can flip on MSNBC and hear you all I want. Your disdain for personal responsibility and your jealous, envious nature towards the successful is a broken record. You do realize that statistically Republicans are much better at giving to charities than your Democratic brethren. It seems Republicans prefer to try help while Democrats just whine.
Remember it’s not just low income people who make bad decisions with money. I’m thinking of someone right now who is cashing in her 401k to repay a personal loan (the bank wouldn’t give her one). The idea was the loan would allow her to get things in order with interest only payments before principal payments began, but there’s been no positive change, so consider many of these people will still want loans they can’t get with the cap, so I sure hope we don’t end up with unintended consequences like organized crime even though it feels like legalized crime now. There’s a point to be made about personal responsibility. Some people just refuse to do a budget. With one friend I pointed out she makes enough money, go through the numbers with her, but it’s the crazy drama that happens throughout the month of her own doing that gets her in to it. I’ve known them a long time (20/30 years) but it hasn’t changed. If this option doesn’t exist, it doesn’t mean you’ll change people’s behavior. Maybe they’ll tighten it up. Hope so. I wish we knew more but how can we condone 600% we cant’.
Bill: “Craig, but no loans like we are talking about right?”
I listed a few options available from credit unions at much lower rates. Those are unsecured loans. So either I misunderstand your question, or you didn’t bother to read my entire post.
Unless you’re talking about there being no equivalent to the outrageous 600% APR charged by the payday lenders. Then I’ll agree – there is no equivalent.
MSNBC liberal? You are a loon Stumcfar. Personal responsibility, what the hell is that? To me personal responsibility would be to charge someone an outlaw rate of 36% at the max. Other states do this and it works for them. They make money by providing a service to people who take the personal responsibility of knowing that they are not gonna get enslaved again for being poor. 36% is terrible, but it can be acceptable if that is your only way to get a couple of hundred bucks, anything higher than that interest, is legal mugging.
One of the reasons ‘pubs are more charitable is they have more financially to give. Democrats are the poor party. You look at a Republican National Convention and it is so so white. The Dem convention is a truer picture of America with so many more minorities. The majority of blacks, native americans, and hispanics are poor and they tend to lean heavily Democrat.
No Craig you cant walk in off of the street and get an unsecured loan from a credit union unless you pay to be a member. That in itself would disqualify most of these people. I doubt very much if they would like Cory said roll that membership into the loan. They are in business of making life easier for their paying members, not give high risk loans.
If you find one of these credit unions that do promote the hell out of it and let us know what you find.
The Blindman
Blindman, our county Poor Relief programs are a statutorily mandated obligation for each county. The only way county officials can avoid compliance is to break the law. The lack of county funds would not be an excuse. If more funds are needed the counties are required to increase property taxes. Each county must plan in its annual budget for this statutory obligation.
County Poor Relief is not a charity. Counties require repayment of whatever amounts are distributed to applicants, and will place a lien on the applicant’s property until the funds are repaid. You can obtain a list of the debtors and the amount they owe from the county auditor’s office.
For example, a February 5, 2014 Pennington County report indicates that the Poor Relief program placed $335,608.17 in liens against indigents for “economic” help during 2013.
Under current (and longstanding) state law County Poor Relief is an alternative to PDLs for a loan without the exorbitant interest charges.
Sounds like you’re trying to move the goalposts Bill.
Sioux Falls Federal Credit Union…. $5 in a savings account makes you a member.
Voyage Federal Credit Union – no fee to join.
Sioux Empire Federal Credit Union – no fee to join.
Service First Federal Credit Union – no fee to join, but you must maintain a $5 minimum balance in an account.
As I stated previously there are unsecured loans available from several of the Credit Unions and although I would consider a 16-17% APR to be a high rate, it is merely a fraction of what the payday lenders charge. Let’s stop pretending payday lenders are doing the public a service. They are not. They siphon tens of millions of dollars out of the pockets of the poor each and every year and transfer it to their own pockets. They don’t help people and aren’t in the business of improving anyone’s finanical situation. They exist to make a profit and they are willing to mislead and abuse their customers to do so.
Here is a local credit union that has a membership fee of $5. You can get an unsecured loan there and rates are based on emplorment and your reputation. No rates are mentioned.
You can also invest in the union without being a member. That will return 1.5% on your investment. http://lakotafcu.org/join-the-credit-union/becoming-a-member/
The Blindman
Craig, then why haven’t they run the PDLs out of business. It it is that simple to get that kind of loan they should have already done it, if they really want to loan that money.
Imnot saying they dont charge to much money, I never have. But there are reasons they arent competing with the PDLs. If there wasnt they would be crippling that industry into retirement.
The Blindman
“Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates. Banks are for-profit corporations, with declared earnings paid to stockholders only.” So how is a payday loan center different than a bank or how is a bank similar to a payday loan center? http://www.responsiblelending.org/state-of-lending/reports/9-Bank-Payday-Loans.pdf
http://www.bankrate.com/finance/credit-unions/pros-cons-credit-unions-2.aspx this is pretty good stuff.
The Blindman
I will take the credit union over the bank any day. The credit union may have eligibility requirements, but so does the gun club. If ya want to belong to something, you have to pay the price. The Young Turks have some free stuff, but they also have member stuff as well. What ya gonna do.
Now back to our pie fight. The banks are just about as involved as the pay day loan centers. They make a lot of money on misery and that ain’t a state. So in order for them to keep their doors open and to still make money, they need a cap, for our safety as well as the short term borrowers. That 36% is a hindrance to their bottom line but it is not a job killer. They still keep their doors open and they provide a service for those open doors. Everyone is happy, just some are not overjoyed.
Bill I already explained it. Credit Unions are interested in loans and deposits and they aren’t spending millions each year in advertising revenue, because their margins are limited by federal law thus they don’t have the ability of charging 100% or more even if they wanted to. That means less in the budget for marketing so you won’t see any fancy storefronts on 41st st in Sioux Falls nor will you see countless television and radio commercials coercing people to borrow money from them.
The fact is, advertising works. There is a reason Coca-Cola sells so much better than any other cola in the world. There is a reason why Billion Automotive can’t seem to go an hour without at least two or three ads on the local radio station. There is a reason Sanford Health pays for high school stadium scoreboards and why they makeup a larger percentage of ad revenue for Kelo and the Argus Leader. The payday loan companies are good at what they do, but ever extra dollar they spend on fancy commercials is a dollar they need to generate in revenue.
I have some problems with Credit Unions in how they make millions and pay zero taxes, but one thing they do right is they focus on their customers. They work to keep costs low and they pass savings on to their customers. That is why most credit unions don’t have multi-million dollar CEOs and why you don’t see their name on the front of sports stadiums.
And they advertise to. Why do you say they dont advertise? All those unions you listed have websites. If they wanted to make those loans they would brag about doing so, especially right now when the irons hot. That isnt happening, and I still haven’t heard of one single p erson that walked into a union and got a loan like we are talking about, low interest high risk. Lets talk to someone who got one of these great loans.
The Blindman
Well Blindman, that is a safe bet. To ask to talk to someone who got one of those embarrassing loans in the first place. You are clear that the only people who get those kinds of loans are folks that are down on their luck as a last resort. These are not the kind of folks who post on Dakota Free Press.
Why do you support the 600% Blindman? I just don’t get that. Maybe the best question is why you feel that 600% is a good number for interest on a note. You do know that there are other folks that use the payday loan centers besides Indians correct?
Bill you continue to move the goalposts. First you say there are no options so I listed a number of options. Then you say there aren’t any of “those types” of loans so I listed several options from Credit Unions. Then you say Credit Unions charge membership fees that the typical PDL borrower wouldn’t have so I posted information showing that at most those “fees” would be $5. Then you shift the subject to why haven’t Credit Unions pushed the payday lenders out of the state due to their lower costs and I explained that they are limited in the maximum interest rates they can charge thus they don’t have room in their margins to allow for massive advertising budgets.
You are claiming I said Credit Unions don’t advertise? Where did I say that? I didn’t say any such thing – what I did do is draw a distinction between what they are capable of doing and what the payday lenders are capable of doing. When you make 600% APR on loans you have a few extra bucks for flashy billboards, glossy mailers, and television commercials with attractive females in tight dresses. Credit unions can’t charge more than 28%, so there is no room for that sort of thing.
So now you move the goalposts even further and say because you haven’t heard of someone who obtained a loan from a Credit Union then it must not be a valid argument. Sure thing Bill… let’s just keep pretending that payday loan centers give loans away to anyone who walks in the door no questions asked while at the same time acting skeptical that a Credit Union would even bother.
Why is it so hard to admit that the payday lenders are just better at marketing, have more visual storefronts, have more money to lure customers etc? Since they don’t have to operate under the same regulatory environment as banks or Credit Unions they have a lot more freedom – and that freedom allows them to prey upon people and put them into a cycle of debt many struggle to climb out of.
I’m not ever going to make excuses or defend the payday lenders. If someone feels it should be ok to charge 600% APR or more on a loan to someone that might be down on their luck then I’d suggest their moral compass needs an adjustment. Many other states have regulated payday lending and our federal government has placed limitations on it to any member of the military. So far we haven’t heard any horror stories from these actions so there is no reason to believe our state will suffer once the payday lenders close up shop. In fact, it could help a lot of people end the revolving debt trap and start getting a handle on their finances once and for all. I’m all for it.